Abyss Scores Court Win Over Former Employee

Jury finds employee used company's intellectual property to his own benefit

SAN MARCOS, Calif.—Abyss Creations LLC and the company's founder, Matt McMullen, have won a $300,000 judgment in a trade secrets/contract dispute with Knighthorse LLC and its owner, Matt Krivicke.

At issue was Abyss' premier product, the RealDoll, an ultra-high-end sex doll made from proprietary materials and with techniques developed by McMullen and his associates—and which McMullen claimed were being stolen by Krivicke while he was still serving as Abyss' Chief Operating Officer up until May of 2008.

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"It's similar to a case involving Mattel and Hasbro," McMullen explained, "where one of the lead artists for Mattel designed the Bratz dolls while he was under contract with Mattel; he did some sketches. So Mattel sued them and this was a multibillion-dollar industry, these little dolls, and Mattel wound up winning because they proved that he had at least conceived the idea for this new line of dolls while he was still under contract with Mattel. So it's sort of the same thing. He more or less decided he was going to start a new company and rather than resigning, he proceeded to continue working at RealDoll for about five or six months, all the while moonlighting and constructing his exit strategy."

Shortly after he left Abyss, Krivicke started Knighthorse and began manufacturing his own line of dolls—and at roughly the same time, sued Abyss for a share of its profits during the two years Krivicke worked there. However, in preparing to defend against Krivicke's suit, McMullen discovered Krivicke's business plans and countersued, claiming that Krivicke had stolen technology used in the creation of the RealDolls.

"It was not so much any specific formula," McMullen said. "What it boiled down to on a number of levels was, his running the company for two years gave him a real deep level of understanding of the entire process—not just how the silicone is made or how the molds are made or how we build the skeletons, but actually where we get the parts, who our suppliers are, who our big clients are that buy more than one doll, all the contacts that go along with it. So it was really an all-encompassing thing that he walked away with."

"Shortly after he filed his lawsuit in late '08, we became aware that he had been starting the first steps of forming a new company while he was still working here," he continued. "Of course, that turned into our countersuit; 'Wow, you can't do that.' He was under contract, and we started the process of pulling all the evidence together and all the little pieces came together and we realized what was going on. What it really boiled down to was a violation of contract and intellectual property; proprietary stuff being used while under contract with our company."

McMullen and Krivicke had known each other when they both worked as artists for a company that designed Halloween masks and costumes. McMullen had left that company in 1997 to start Abyss, and hired Krivicke in '06. During the course of the lawsuit, Krivicke claimed that it was he who had taught McMullen the tricks of sculpting human features on the dolls, and Krivicke's attorney Laurence Haines argued to the jury on Tuesday that Krivicke's "Yvette" doll is "more life-like" than Abyss' RealDolls. However, juror Rosemary Aquilante told North County Times reporter Ray Huard that the dolls were "creepy" and felt "kind of oily, squishy ... We just [saw] them as widgets."

Knighthorse is still in business, and with the jury's award of damages, McMullen and his attorney are now "trying to figure out how that should be enforced and what kind of action the legal system takes," McMullen said.

"It's been a torturous journey and I wouldn't wish it on anyone in the world," McMullen said ruefully. "Going through a lawsuit is not cool at all."